Property Buying Advice

How to avoid being ripped off

Free or subsidised property inspection trip

Is there such a thing as a free lunch? You are likely to pay too much for the property in this case. You will need to take your time to check things out for yourself, with your own advisors. One of the companies offering this service marks the properties up by euro 20,000 to30,000 to pay for its subsidised flights. It claims that 80% of customers fall for this ruse.

W from Yorks is in no doubt that you should go.out and look before buying but not on a subsidised trip.

"Anyone looking to invest on the Islands, must visit. There is a big contrast between the Islands. None of this can be gauged by Holiday programmes, A Place in the Sun, or even less by a developer's brochure. There is so much spin going on between the different islands, the only way you will work it out is - GET ON A FLIGHT and see for yourself, as we have done."

P from Berkshire had a narrow escape

"I went to a Property show advertised as a large show with many locations, stands etc, when I arrived it was Mark Up only. I was looking for a holiday home..no leaseback, no investment just a little place for my family to holiday. Mark Up advised me I wouldn't get anything under 200K and still today nearly 2 years later continue to call me, even though I advised them I got a little (really little) beachside apartment for 85K over a year ago. I really would never use them or reccomend them, as from the start its big business/hard sell tactics."

Check that the price is right.

How does the price compare with other completed or nearly completed properties in similar locations in the Cape Verdes? J&T from London feel that some may have gone over the top

"We also looked at some properties and we are reviewing our options at the moment. We think the area has massive potential however we do think they will need to review their pricing to make it more appealing to the British market. We thought it was very expensive for an underdeveloped market but in some ways it would be quite nice to keep the mass market Brits away for a bit longer...."

Check prices of several other similar properties that are completed and actually selling. Some promoters will announce ridiculously excessive prices just to fool you. Then they offer a discount.

Is the price from the developer or marked up as a premium by a reseller?

If it is a premium price are you getting extra protection?

Check any claims against likely reality

S from London found an internet site with some amazing claims.

" Clicking on an advert and being diverted to a broker website, I was promised the following:- - Buy property below list price - Buy now pay up to 2 years later - up to 70% capital growth in two yearsa. - guaranteed 5% investment returns - 10 year building guarantee - we will not be beaten on price! I was invited to click for further information. There is no further information but a form to fill in. Surprise, surprise - I then received a call from a Mark Up Man that knew nothing about 10% guaranteed returns or a 10 year build guarantee and claims that capital growth will probably be more like 70%. Pushed further on the above, he then rambled on about their success story and have I heard of them!? How is it that these characters are still in business? There are plenty of good, honest agents selling in CV. Just beware of the sharks!"

How will future charges affect you

One of the largest agents is very adept at bringing up extra charges later as T from Birmingham discovered .

"We have had similar problems with MacAnthony Realty (MRI) - lack of information, spurious charges, misleading claims, over-pricing, etc etc - the list goes on and on. The truth of the matter is that there has been no capital growth (MRI said 30% in year 1) there is no rental scheme in place there is no negotiated management scheme the development in front of ours - never mentioned in pre-sales talks - pops up after 9 months five resorts all share the "private facilities" MRI furniture pricing is extortionate - I have a really good quote for £6.000 for my 2-bed (fully inclusive of white goods and air-con plus fully delivered, installed and fitted from elsewhere - all with a 3-year warranty! the latest "gimmick" is the inspection fee - €4500 per property! Get out of here.... The only good thing is the apartment is looking really nice and the location is sound. I just have to hope that sooner or laterMRI move on to pastures new and forget all about us so we can get on with life,"

Land Ownership and Planning Permission

Who owns the land? Is it the person that you have met? If not it is easy to check at the Camara.Is there planning permission filed in the Camara? In this case the Camara stamp will be on the plans. Ask for them and check that what is being built is the same.Who owns the land on either side and in front and what will be built there later? Will it spoil the view? What is the orientation vis a vis sun and wind? There is usually a strong North Easterly wind.Are there any paved access roads, drainage, electricity services? If not you will probably have to pay for them. . Does the plan specify the external and internal colours? Do the dimensions include balconies and corridors or just living space? What is the planned completion date if the building is not ready? How realistic is this date?

What will you receive in terms of guarantees and ownership documents when you pay a deposit or the first stage payment?

Building Specification

How fully furnished will it be - including kitchen appliances, furniture bedding and contents? Get an inventory as it is very difficult to obtain these items in the Cape Verdes. What extras are there to pay for? eg tiling, lighting.Can you get substantial furniture up the stairs and through the doors? Is there any space to park cars and where is the nearest drop off point? There will be more cars in future.Is there any storage space for your possessions when the property is let to others?How high are the ceilings particularly in the penthouse flats? Some do not have standing room except in the centre. In what way has the building been adjusted for the tropics and wind? Or will it require air-conditioningwhich is difficult to install later and costly in the Cape Verdes.Who is the architect? Did the building even have one? Some do not and it shows.

T`s profession is selling houses in the Costa Blanca

"We could deal direct with the builders but again the lack of any guarantees is a very big worry for me, if we do anything I am now convinced we would have to purchase the land and over see the construction, this way we can offer guarantees and mortgages to our clients and at the same time ensure that the build quality is to European standards.

We witnessed blocks of apartments being built with concrete which was mixed by hand, one of my employees is an ex site manager for the builder Mowlems plc and was staggered that the concrete does not have quality control tests to ensure consistency of strength. I agree that prices should be under 1000 euros per square meter, we currently sell properties in very good area of Spain for around 2000 euros per square meter with no gambles and the ease of travel associated with buying so close to the UK not to mention the facilities on our doorstep."

Maintenance and maintainability

What is the construction material, including doors, windows etc? The sun is very powerful and destroys some plastics. Generally fittings are poor and hard to replace except in Portugal. What are the arrangements for power supply and for back-up with failure of the mains supply - a common occurrence?What is the water supply? If it is a tank, who is going to reorder? Is the tank safe to drink from?Are there any rules for condominium living eg pets, noise etc? Who manages the tenant's committee? Are there other residents with whom you share a language? Will they agree with you about maintenance issues?

What is the maintenance contract and how will it be increased on an annual basis? What does it include? Who will organise repainting? roof repair?

What are the security arrangements? Praia and Santa Maria suffer from extensive burglary.

Developer Substance and Record

Has the developer ever done something like this before? Many have not. Ask to see the track record and check previous buildings. Do they have the right Cape Verde contacts to make things happen?

What will happen to your investment if the developer or promoter runs out of cash and all building work stops? Ask for a company balance sheet or bank guarantees. Can you take out insurance?

Do you have any comeback if the development is years late? Several in Santiago have fallen well behind schedule.

T is an estate agent in Barcelona who has seen what has gone wrong on the Costas.

"Absolute Estates I believe are a relatively new estate agent, I have heard of them but more importantly I have not heard of any bad reports of them. The coast is littered with bad estate agents who give the profession a very bad name and put commissions above ethics, I know many of these will be targeting the Cape Verde Islands where they can set up a company under a different name and continue their scams undetected for a while at least.

I know of Tom Sheey who is now selling several developments to his investors. Tom I believe to be a good man whose reputation goes before him, he also owns an apartment half a mile from my office.

He is currently marketing White Sands resort amongst others again most of his customers would not bother to fly over, I spoke with a girl in his office at the airport who informed me that they did have 10 detached villas for sale with pools on the complex but these have all been sold for 600,000 euros each. Some 2 bedroom apartments at the back are still for sale at 120,000 euros eventually these properties may be worth this kind of money but today I think that people are going to be disappointed at best and ripped off at the very worst. I did go through your website before going over and was pleased to see you painting a much more realistic picture than other websites, if people buy from your website knowing the facts or after visiting you should come through the other side with your head held high.

I can see you getting more and more involved in the sales side which you will get commissions for and if you are honest and helpful you could make a lot of money, and if you are dishonest you can make even more.. Choose the first option!

Commercial Potential

Are you buying just for your own use or do you hope to get rental income? If so how will you market the property?

Do you know what sort of people are renting in the Cape Verdes and how much they will pay?

What do you know about the local rental market? Are there many empty properties that will be let out for next to nothing nd spoil the market? How much do hotels cost?

If you are being guaranteed a rental on what is this based? Is it net or gross? What happens if the rent does not come in at the expected rate - will you still get paid? For how long will it last?

What taxes are you going to pay? Income tax is due first in the Cape Verdes but then also in the country in which you are resident. Capital gains tax is due on a resale in the Cape Verdes but also in your country of residence. There is no double taxation agreement between the UK or Ireland and the Cape Verdes.

Under-declaration or selling price to the Land Registry

Many developers and resellers will ask you to record a lower selling price so as to reduce their liability to the Cape Verdes 3% Sales Tax. This will expose you to 40% Capital Gains Tax in the UK on the amount under-declared or 20% in Ireland. it is also a criminal offence in Cape Verde, which could lead to confiscation of the property if discovered. J from Ireland comments

"Any EU lawyer that knowingly participates in this under-declaration of tax in Cape Verde is participating in money laundering. Any client of such a lawyer who does so, is also money laundering. See the EU Money Laundering Directive, as implemented in national legislation. This will put the lawyer at risk of civil and criminal proceedings in their home state, and also the loss of their licence to practice. No decent lawyer will facilitate their clients in doing this."

Documents required for purchase in Cape Verde

Buying Cape Verde Land

Information on Cape Verde property issues?

capeverdeinfo.org.uk